Football’s big showdown has rolled around again, and with it the recurring editorial need to dredge up ways to tie sports to the stock market.
In other words, it’s time to talk about the Super Bowl indicator, the implausible but entertaining tool that attempts to link the calendar year’s stock market returns to the outcome of the big game.
For those playing at home, the premise of the indicator is that if a team from the old NFC, or one with NFC roots wins the game, the Dow Jones Industrial Average goes up for the year, whereas if a team from the old AFC team wins, the index falls.
Over the past 53 years, the indicator of the market’s direction has been right 40 times and wrong 13. That gives it a success rate of basically 75%. The success rate has suffered in the recent past, as the indicator has failed four years in a row, its longest streak of failures.
There are circumstances when the indicator is more successful, however, such as when a team from the NFC, or one with NFC roots, won. NFC teams have won the Super Bowl 37 times, indicating the market would rise that year. In those years the indicator has been correct 31 times, giving it a success rate of nearly 84%.
When the big game is played in Miami, as it will be this year, the indicator has been correct 90% of the time. The only exception was 1999, when the Broncos beat the Falcons. Still, the Dow rose 25.2% that year, so bulls probably shouldn’t be too concerned.
Playing the Super Bowl in Miami is correlated with positive market returns overall, with the Dow up 9 of the 10 times the game has been played there. The only exception is 1969 when the New York Jets beat the then Baltimore Colts, and the Dow fell 15.2%.
Still, the strongest correlation with indicator accuracy appears to be with attendance. In years when Super Bowl attendance was above average, the indicator has been accurate 94% of the time. The last time that didn't prove true was in 1970, the last year the the Kansas City Chiefs were in the Super Bowl.
The San Francisco 49ers have appeared in six Super Bowls. The indicator was correct four of the five times the team won. The Dow has only fallen one year when the 49ers were in the Super Bowl, and has averaged a 17% gain overall in years when they appeared.
Past performance is no guarantee of future returns, of course, But it does appear that the real winners this year will be the bulls.
Super Bowl LIV kicks off at 6:30 p.m. Eastern on Feb. 2. The Kansas City Chiefs and the San Francisco 49ers will play at Hard Rock Stadium in Miami Gardens, Fla.